International Taxation of Oil and Gas and Other Mining Activities

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1 Overview and Learning Objectives This course is designed to provide participants with in-depth analyses of international taxation issues related to oil and gas and other mining activities. It starts with an overview of relevant international tax considerations in this field and how these tax risks are managed. The tension between source and residence taxation of multinational enterprises and their employees involved in the oil and gas and other mining activities are explored further in sessions dealing with offshore exploration activities, permanent establishments, treaty characterization of various types of income that are associated with this industry and the taxation of expatriate employees. The course concludes with analyses of transfer pricing issues that are commonly found in the oil and gas and other mining industries and provides insights into how these issues are managed. This is an interactive course with a maximum of 30 participants. Prior to the course, participants will be given access to a documentation platform which provides them with additional pre-reading material and supplementary material (e.g. legal documentation, case law and related articles/literature). During the course, participants will be provided with a course binder containing documents relevant to the course. Who should attend? The course is ideal for in-house tax managers, advisors and government officials working with enterprises or individuals involved in the oil and gas and other mining industries. Course Level and Prerequisites This is an intermediate level course. Participants should be familiar with the basic tax treaty concepts and the domestic law of at least one country, in particular as it relates to cross-border situations.

2 Day Registration Welcome and IBFD Overview International Taxation of Oil and Gas and Other Mining Activities Introduction special features of the industry Domestic tax rules and relation to cross-border activities Array of taxes and other forms of government recovery from natural resources Relationship between tax treaties, domestic law and EC law Overview of issues relating to cross-border activities and typical approaches to them Examples of regimes for taxation and regulation of resources Break Refreshments International Taxation of Oil and Gas and Other Mining Activities Managing International Resource Tax Issues - A Producers Perspective Company legal entity and capital structure Formulation of extraction contracts Political context for resource tax policy and tax administration Investment analysis of resource projects Fiscal stability Managing tax operations, including transfer pricing management: Extracted product Technical services Research & technology Unsuccessful projects Tax accounting and disclosures Cases of tax managerial challenge Offshore Exploration Activities Limits on taxing jurisdiction Exploration and exploitation of natural resources Sourcing rules Characterization of offshore activities and methods of taxation Case study

3 Offshore Exploration Activities (continued) Day 2 Offshore construction clauses Definition of offshore activities Building, construction & installation Drilling rigs & ships Incidental activities PE Concepts Importance of the PE concept Construction site PEs Service PEs PEs and exploration and extraction activities PEs in offshore activities PEs and pipelines How to minimise your PE exposure Attribution of profits PE Concepts (continued) Characterization of Income for Treaty Purposes Importance and impact of treaty characterization Residence vs. source state taxation Business profits Royalties Management and technical services fees Personal services Transportation income Case Law Examples Characterization of Income for Treaty Purposes (continued) Leasing & rental income Bareboat and time charters Supply of equipment Personal services Contract fees Subcontractors

4 Day Taxation of Expatriate Employees General trends in the taxation of cross border employment income - Secondment agreements - International hiring-out of labour - Use of expatriate employment entities Taxation of expatriates in the offshore industry - Offshore clauses - Activities onboard a vessel - Construction activities - Drilling activities Taxation of expatriates in the oil & gas industry and the mining sector - Mining and oil concessions & regulations Taxation of employment income under the OECD model Default rule - Exemption period - Director fees - PE situations - Changes brought by OECD model 2010 & case studies Taxation of Expatriate Employees (continued) Transfer Pricing issues in the Oil and Gas Industry Part 1 Importance of transfer pricing in international oil and gas and mining activities Transfer pricing of commodities, use of marketing / trading structures in the resources sector Pricing of core services and IP Financing issues Case studies Transfer Pricing issues in the Oil and Gas Industry Part 1

5 Day Transfer Pricing issues in the Oil and Gas Industry Part 2 Transfer pricing issues in the oilfield services sector Equipment leasing - focus on vessel chartering Exploration activities and transfer pricing e.g. global exploration groups, early-stage financing issues Tax authority experiences Case studies Transfer Pricing issues in the Oil and Gas Industry Part 2